Correlation Between VICI Properties and CubeSmart
Can any of the company-specific risk be diversified away by investing in both VICI Properties and CubeSmart at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining VICI Properties and CubeSmart into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VICI Properties and CubeSmart, you can compare the effects of market volatilities on VICI Properties and CubeSmart and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in VICI Properties with a short position of CubeSmart. Check out your portfolio center. Please also check ongoing floating volatility patterns of VICI Properties and CubeSmart.
Diversification Opportunities for VICI Properties and CubeSmart
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VICI and CubeSmart is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding VICI Properties and CubeSmart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CubeSmart and VICI Properties is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on VICI Properties are associated (or correlated) with CubeSmart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CubeSmart has no effect on the direction of VICI Properties i.e., VICI Properties and CubeSmart go up and down completely randomly.
Pair Corralation between VICI Properties and CubeSmart
Given the investment horizon of 90 days VICI Properties is expected to generate 1.11 times less return on investment than CubeSmart. But when comparing it to its historical volatility, VICI Properties is 1.3 times less risky than CubeSmart. It trades about 0.13 of its potential returns per unit of risk. CubeSmart is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,067 in CubeSmart on August 24, 2024 and sell it today you would earn a total of 793.00 from holding CubeSmart or generate 19.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
VICI Properties vs. CubeSmart
Performance |
| Timeline |
| VICI Properties |
| CubeSmart |
VICI Properties and CubeSmart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VICI Properties and CubeSmart
The main advantage of trading using opposite VICI Properties and CubeSmart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VICI Properties position performs unexpectedly, CubeSmart can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in CubeSmart will offset losses from the drop in CubeSmart's long position.| VICI Properties vs. Broadstone Net Lease | VICI Properties vs. Armada Hflr Pr | VICI Properties vs. Brightspire Capital | VICI Properties vs. Safehold |
| CubeSmart vs. Public Storage | CubeSmart vs. National Storage Affiliates | CubeSmart vs. Prologis | CubeSmart vs. Extra Space Storage |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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